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Star Witness In Iran Sanctions Case Admits In Court To Paying Bribes

Turkish-Iranian businessman Reza Zarrab (R) and banker Mehmet Hakan Atilla

The U.S. government's star witness in a high-profile Iran sanctions case has admitted in court that he paid bribes to secure his release from a Turkish jail after he was arrested in a sweeping corruption scandal in 2013.

Reza Zarrab, in a fourth day of testimony in New York after pleading guilty to charges that he helped Iran evade U.S. sanctions, said he made payments to secure his release in February 2014 after he was arrested in 2013 for his alleged role in a scheme to help Iran evade UN sanctions.

Zarrab did not say how large his 2014 bribe payments were or who received them. The Turkish government did not immediately respond to the allegation.

Zarrab is cooperating with U.S. prosecutors and testifying in their case against Mehmet Hakan Atilla, an executive at Turkey's state-owned Halkbank, who is on trial as Zarrab's co-conspirator in a scheme to launder $1 billion of Iranian oil and gas revenues through U.S. banks and global markets in violation of U.S. sanctions.

Zarrab testified that he worked with Halkbank on behalf of Iran both before and after his arrest in Turkey, and continued to do so until his arrest in the United States in March 2016 when he arrived in Florida for a Disney World vacation with his family.

Zarrab said that Atilla also continued participating in the Iran sanctions scheme after the Turkish investigation was dropped and he was released from jail.

Atilla denies the charges, and Halkbank has said all of its transactions complied with national and international regulations.

On December 4, Atilla's lawyers said in a letter to the U.S. district court judge hearing the case, Richard Berman, that prosecutors improperly delayed turning over evidence that could have helped their client.

The lawyers said the evidence showed that Zarrab was willing to lie in exchange for leniency.

According to the defense attorneys, Zarrab said "you need to admit to crimes you haven't committed" to get a reduced sentence in the United States, in a summary prosecutors provided the defense on December 2 of a September 15, 2016 phone call Zarrab had while he was in prison.

"Zarrab is proclaiming his willingness to fabricate testimony out of whole cloth in order to obtain a reduced sentence," Atilla's lawyers told the judge.

Moreover, they said the delay in turning over the phone call audio recordings to Atilla's defense team "significantly impairs the ability of the defense to properly and effectively utilize them at trial."

Prosecutors declined to comment.

"Mr. Zarrab understands his obligation to provide fully truthful testimony," Robert Anello, a lawyer for Zarrab, said in an e-mail.

U.S. prosecutors have charged nine defendants with taking part in the sanctions evasion scheme. Only Zarrab, 34, and Atilla, 47, have been arrested by U.S. authorities. The others, including several high-ranking Turkish officials, remain at large.

Zarrab's testimony has implicated top Turkish politicians, including President Recep Tayyip Erdogan, who has claimed that his political opponents are behind both the U.S. case and the Turkish case that led to Zarrab's 2013 arrest.

Turkish Prime Minister Binali Yildirim said on December 1 that the U.S. case was an attempt to undermine Turkey's economy, and the state-run Anadolu news agency reported that Turkey would seize Zarrab's assets.

With reporting by AP and Reuters